How older Australians could benefit from the first homebuyer scheme

The Federal Government’s first homebuyer scheme is being touted as a game-changer for older Australians who have taken the first steps toward homeownership.

Under the innovative Help to Buy scheme, the government plans to contribute a substantial 40 percent for new homes and 30 percent for existing ones, allowing a wave of first homebuyers to enter the market with as little as a two percent deposit.

While the shared equity proposal has successfully navigated the House of Representatives, its fate still hangs in the balance as it awaits approval in the Senate. Despite some reservations from the Greens and economists like Peter Tulip, who argue that the scheme falls short, experts believe it could be a lifeline for older Australians.

Brendan Coates, the program director at the Grattan Institute, emphasises that the scheme if passed, could be a significant boon for older renters at risk of financial insecurity in their retirement years.

“Yes (the scheme) will help first-time buyers, but I actually think the bigger benefit is helping older Australians,” Coates said.

“They may have a deposit but they’re not going to be in the workforce long enough to pay down the full value of a home by the time they retire.”

This timely intervention could spare older Aussies from the challenges of renting during retirement, a period when median rental property costs soar to around $25,000 annually, while the aged pension caps at approximately $28,500 for singles each year.

Amid such discussions, Anglicare Australia and the Council on the Ageing (COTA) recently joined forces to advocate for increased social housing options for older adults. The focus is squarely on shielding older individuals from the adverse impacts of housing stress, which has become an escalating concern.

Responding to the Rental Affordability Snapshot by Anglicare Australia, it was revealed that only 0.4 percent of rental listings across the country were affordable for a person on the Age Pension. Couples fared slightly better, with just 1.1 percent of rentals within reach. These figures represent record lows in the fourteen-year history of the Snapshot.

Kasy Chambers, the Executive Director of Anglicare Australia, recently highlighted the alarming trend, stating, “Our Rental Affordability Snapshot shows that a person on the Age Pension can afford 0.4% of rental listings across Australia.”

“We’ve been releasing this Snapshot for ten years and this is the worst result we’ve ever seen. Couples are barely better off. They can afford just 1.1%,” Chambers said at the time.

“We know why this is happening, and we know how to fix it. Every year, Australia’s social housing shortfall gets worse and worse. We have a shortfall of almost 640,000 social homes. Many older people depend on these homes for security as they get older.

“Without action, older people will simply be left to the mercy of the market.”

-with AAP.